Μake us preferred on Google The Greek government has set itself an ambitious investment target: raising annual investment from about €46 billion to more than €65 billion, equivalent to around 20% of GDP, as it seeks to close a long-standing gap with the rest of Europe.
Getting there would require an increase of roughly €19 billion from current levels. The challenge is not simply one of funding. It is whether Greece can turn a large pool of available public and private capital into actual investment quickly enough, while navigating risks ranging from market volatility and higher financing costs to political and geopolitical uncertainty.
The scale of the gap remains significant. According to a study by the Center for Liberal Studies – Markos Dragoumis (KEFiM), an independent, nonpartisan liberal think tank in Greece, fixed-capital investment stood at 16.88% of GDP in 2025, compared with 21.32% across the EU-27. Despite a recovery since 2020, Greece remained 4.4 percentage points below the EU average. Most of the shortfall was in private investment, and particularly business investment. Public investment, by contrast, was already broadly in line with European levels.
With public investment already broadly in line with the EU average, most of the increase will have to come from the private sector. Analysts say the central question is whether the financing already available can draw in more business investment and turn current interest into projects that are actually carried out.
Recovery Fund pipeline remains a key support
One reason analysts believe the €65 billion target is achievable is the volume of Recovery Fund-backed projects that have yet to be completed. Market executives say there is still a sizeable pool of investment waiting to move from financing and approval into contracts and implementation. As those projects progress over the next few years, they are expected to keep contributing to overall investment even after the program’s initial phase has ended. They estimate that Recovery Fund-backed projects alone could generate €6 billion to €7 billion in investments each year.
That gives the government a significant amount of investment already in the pipeline. The key question is how quickly those projects can and will move forward and how much additional private capital they can attract.
Low-cost loans could broaden the investment base
A second source of potential growth is €2 billion that is due to be channeled to small and medium-sized businesses through the Hellenic Development Bank. Orestis Kavalakis, governor of the Greek Recovery and Resilience Agency, has said the first loans could be issued as early as 2026. At an interest rate of about 0.35%, the financing would be exceptionally cheap.
Market participants expect demand to be strong enough for the funds to be fully absorbed. The more important test, they say, is whether the money reaches businesses with credible investment plans and the ability to move quickly from approval to execution. That matters because the investment gap cannot be closed by Greece’s largest companies alone. A broader section of the corporate sector will need to participate if the current momentum is to continue.
Large groups are also preparing to spend
Greece’s largest business groups are another potential source of investment. Many have significant cash reserves, giving them room to finance new projects without relying entirely on outside funding.
Market sources say several large deals are already being prepared and could add to investment over the coming years. Defense is one sector expected to attract significant capital, with established companies planning major projects. Large infrastructure developments could also contribute, including the Vertical Corridor and other projects already under consideration.
The importance of this spending is that the €65 billion target cannot be reached through public funding alone. Investment by large companies will have to account for a meaningful share of the increase.
Green funds add to the available capital
European money for the green transition is another source of investment. Greece is due to receive between €4.77 billion and €5.3 billion through the Social Climate Fund by 2032. The Islands Decarbonization Fund, meanwhile, includes €2.3 billion for projects and measures aimed at transforming the energy and environmental profile of the country’s islands.
Taken together, these sources could help explain the confidence with which the government has presented its investment target. “The positive momentum is there and the capital is visible,” said a senior market executive who works with Greek and international funds and business leaders. “But the math will ultimately depend on absorption, project maturity and the speed of execution.”
That is the central constraint. Greece may have access to substantial amounts of capital, but whether it reaches the €65 billion target will ultimately be determined by how much of it can be deployed and how quickly projects move from financing plans to investment on the ground.
The bigger risks lie outside Greece
The biggest uncertainty is the international environment. The government’s target assumes that companies remain willing to invest and that financing remains readily available. A major market shock or economic downturn could quickly change both.
One concern is the possibility of a sharp correction in U.S. markets, particularly after the surge in valuations tied to AI. Such a sell-off could weaken investor confidence more broadly and make companies more cautious about committing money to new projects. Renewed concerns over public debt could have a similar effect, pushing borrowing costs higher.
Europe presents a different set of risks. Political developments in Germany and France could complicate economic decision-making at the EU level and jeopardize joint initiatives, particularly if far-right parties gain power and challenge existing European policies. That, in turn, could create greater uncertainty around investment decisions and capital flows across the bloc.
Source: OT, TO BHMA print edition
